When Bad News Is Good News
by Charles B. Carlson, CFA
Dow Theory Forecasts

If you are wondering whether the market's recent strength is going to continue, a good reason to be positive is this - for the first time in several months, the market is holding up in the face of bad news.

For example, following the brief but severe drop in the market as a result of the Fed not lowering rates at its latest meeting, the market came roaring back, recouping its decline and then some.

Also, when retailers announced sluggish results recently, the market didn't fold. Instead, it held and then moved higher.

And the market didn't tank when a few companies missed the certification deadline for financial reports.

That the market is holding up in the face of negative news is a big deal in that this had been a missing ingredient to the bullish case.

Thus, investors should not be surprised is the market continues to move higher in the near term, perhaps to around the 9500-9700 level on the Dow.

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